Possible but not cost effective, I'm not about to pay for hundreds of gigabytes just use an iPad, when my laptop or iMac can do it so much better without the added cost.
Desktop/laptop/external storage is free?
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I don't know. I use office on my iPad & while the apps are great, they are definitely limited in what they can do & not really just advanced layout work. Things like building a table of contents aren't supported on the app. These aren't the types of things that I'd consider advanced work. I love the iPad office apps & use them all the time, but they definitely work best in conjunction with, rather than as a replace for, the mac/windows apps.
This is a limitation of MS Word for iOS, not the iPad itself. For more complex long form writing, you can use other apps like Scrivener.